Gold and Silver Drag on Further Euro Worries
Both precious metals were hindered by a stronger U.S. dollar. The greenback index rose to as high as 82.61 as the euro continued to struggle. “We are seeing the headline-driven market continue to prop up the greenback amid the growing threat of a Spain bailout paired with fears of a Greek exit,” said David Song, currency analyst at DailyFX. The euro dipped below $1.25 for the first time since 2010.
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Today, Egan Jones downgraded Spain’s credit rating from B to BB-. It was the third downgrade from the agency in less than a month. Reuters reports, “Much as it did in downgrades last week and in late April, the company pointed to deteriorating public finances and worries that the country will be faced with sizable payments to support its banking sector. Spain is battling a debt crisis that is shaking its government, banks and companies. The country will soon issue new bonds to fund ailing lenders and indebted regions despite borrowing costs nearing the 7 percent level that drove other states to seek a bailout.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined 1.26 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell 2.23 percent. Gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) both fell more than 2 percent. Meanwhile, silver names such as Silver Wheaton (NYSE:SLW) and Endeavour Silver (NYSE:EXK) declined 1.32 percent and .78 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS